Annul an Undischarged Bankruptcy By Filing a Consumer Proposal

An undischarged bankruptcy can often appear to be a dead end, but did you know it’s possible to annul it by filing a consumer proposal? This is a method that has proven to be beneficial in various scenarios.

While it is common to believe that once bankruptcy is declared, one must remain so, a consumer proposal allows for an alternative route. Notably, the proposal must be approved by creditors, and it only applies to debts that were present before the declaration of bankruptcy.

In this article, we will delve deep into the process, reasons, and benefits of annulling an undischarged bankruptcy by filing a consumer proposal.

What is a Consumer Proposal?

A consumer proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). Under this process, you make an offer to your creditors to pay back a percentage of what is owed to them or extend the time you have to pay off the debts, or both.

Consumer proposals are an effective way to handle unmanageable debt.

Annulling an Undischarged Bankruptcy

To annul a bankruptcy, a consumer proposal can be filed. This proposal can include only debts that were owed prior to the bankruptcy. Any debt incurred after the bankruptcy cannot be included in this proposal.

Remember: even if your bankruptcy, which has not been discharged, was filed with a different trustee, a consumer proposal can still be filed to annul it.

Why Annul a Bankruptcy with a Consumer Proposal?

There are several scenarios where it may be beneficial to annul a bankruptcy by filing a consumer proposal. Here are a few examples:

  1. A bankrupt individual receives a substantial inheritance. To access these funds promptly and avoid having a bankruptcy record, she files a consumer proposal, ensuring her debts are fully paid.
  2. A bankrupt person secures a high-paying job, increasing their income significantly. The person is now required to pay $1,000 per month for 21 months. To ease the financial burden, the person decides to propose $500 over 60 months, creating a more manageable cash flow.
  3. A bankrupt person has investments she believed were registered retirement savings plans (RRSP), thus protected from the Trustee. However, the RRSP company confirms that they are unregistered and would be sent to the trustee. To safeguard these funds for her retirement, the bankrupt person decides to file a consumer proposal.

These examples illustrate that it can be beneficial to explore the option of annulling an undischarged bankruptcy by filing a consumer proposal.


If you find yourself considering this option, it’s crucial to seek professional advice to understand your rights and the possible courses of action.

To meet with one of our professionals, schedule a free consultation or give us a call today.

We are here to help you navigate this process!


Annulling an undischarged bankruptcy by filing a consumer proposal can be a viable strategy for individuals finding themselves in financial distress. This route can provide a more manageable payment plan and even help protect valuable assets. Always remember to consult with a professional to ensure you are making the best decision for your financial future.

Take action today to annul an undischarged bankruptcy by filing a consumer proposal. Don’t let bankruptcy define your financial future.

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